Sensi Products co-owner Lisa Tollner talks California’s new regulations, and how CBD’s Schedule I status may actually be a good thing.

Her concerns stem from the fact that while major players in banking, real estate, insurance, and pharmaceuticals have thus far been wary to get in bed with the cannabis industry, should the U.S. Drug Enforcement Agency eventually overturn the substance’s Schedule I status as a controlled substance, the corporate floodgates will open.

“The only thing that’s keeping pharmaceutical companies from coming in and squashing all of the little companies is the Schedule I status,” Tollner says. “They’re not going to put millions of dollars into something that they’re not going to be able to sell across the nation and worldwide.”

At the center of the controversy is cannabidiol, commonly known as CBD. Lacking the signature psychoactive properties of fellow cannabinoid THC, CBD has become a popular and proven alternative to prescription solutions that come with problematic side effects. Often used to treat chronic pain, anxiety, insomnia, and inflammation, CBD represents a potential cash cow for the mainstream pharmaceutical market should its legal status be overhauled.

Tollner, whose South Bay company Sensi Products makes a range of CBD and THC supplements, sees the current Schedule I classification as a double-edged sword that limits what her company can do but also keeps larger corporate interests from dominating the market.

“In some ways it’s our last bastion,” she says. “We’re talking about big, powerful, very well-funded, lobby-driven pharmaceutical companies that have very deep pockets. They could take over the whole industry in no time.”

The fear looms, but for the time being, companies like Sensi Products are busy with a more immediate concern. Last month, California finally released long-awaited guidelines that will inform every facet of the recreational cannabis market that’s set to go into effect on Jan. 1. Rules governing child-resistant packaging, portion size, and the maximum amount of milligrams per product will now decide which companies are capable of being in compliance, and which ones will be forced out of business or back into the shadows of the black market.

While Tollner and Sensi Products have been ahead of the curve with child-resistant packaging and lab testing efforts since the company launched in 2010, they too will need to make some adjustments to adhere to the state’s regulations.

One such change involves scoring products so they can be easily separated into 10 mg doses. Another will require the discontinuation of the brand’s 200 mg “Extra Strength” offerings, which exceed the new total strength limit of 100 mg of THC. Tollner intends to comply, but does call into question the logic behind some of the new rules.

“There are a lot of people who don’t feel any effect unless they have over 100 mg,” she says. “They really need to take more, and so now it’s going to be prohibitively expensive for them to get the kind of potency they need.

“The other thing that I found a little odd is that they’re saying it’s OK for tinctures and topicals to be over 100mg per pack — they can go as high as 2,000 mg,” she adds. “I find it a little odd that it’s OK for a tincture to be 2,000 mg but not soft gels.”

Tollner believes that lobbyists may be able to loosen some of the arbitrary restrictions once the industry has had a bit of time to prove things are under control. She notes that negative press can play a significant role in turning public opinion. Articles on accidents involving stoned drivers — or children somehow ingesting their parents’ medicine — can mean that strict policies remain in place longer.

As for other players in the market, Tollner concedes that some will likely be unable to reach compliance, but she notes that everyone in the industry has seen these restrictions coming for quite some time.

“There are still a few companies, collectives, and dispensaries I’ve talked to in different parts of the state that have been very slow to recognize what’s coming,” she says. “They’ve known that the regulations were coming out, but they didn’t take a proactive stance on finding a local facility that would work, or making sure they’re in the right zoning, or working with their local government to figure out what’s going on. I don’t know if they’ve been in denial or just procrastinating, but now the reality of it is really setting in for a lot of them.”

The choice these businesses now face is fairly clean-cut: Comply or disappear.

“You hate to put all of this money and energy and investments into a company and a product only to be shut down, so they basically have two options: They’re going to be in the black market or they’re going to be legit,” Tollner says. “You kind of just have to decide.”